Economics: The Last Bastion of Rationality

2011 ◽  
Author(s):  
Gilles Saint-Paul
Keyword(s):  
Economic Theory ◽  
Point Of View ◽  
Competitive Markets ◽  
Free Markets ◽  
Global Efficiency ◽  
Laissez Faire ◽  
Theory Lead

This chapter examines how the assumptions underlying economic theory lead to a presumption of laissez-faire, and why this apparatus is fragile because those assumptions are not grounded on empirical observations but on methodological requirements instead. Many people traditionally think of economists as advocates of laissez-faire, that is, letting the free operation of markets determine how resources are allocated throughout society. This presumption comes from some central results of economic theory which predict that, in some sense, free markets lead to desirable outcomes from the point of view of global efficiency. Essentially, these results come from two observations. First, competitive markets allow all voluntary transactions to take place. Second, all voluntary transactions are mutually advantageous and therefore increase the welfare of both parties.

Whatever Happened to the Cambridge Capital Theory Controversies? (With comments by L. Pasinetti, F. Fisher, J. Felipe and J. McCombie, R. Greenfield and reply by the authors)

2009 ◽  
pp. 4-27
Author(s):  
A. Cohen ◽  
G. Harcourt
Keyword(s):  
Economic Theory ◽  
Economic Thought ◽  
Point Of View ◽  
Chronological Order ◽  
Capital Theory

The article written by the well-known theorists and historians of economic thought contains a detailed overview of the Cambridge capital controversy, which had raged from the mid-1950-s through the mid-1970-s. The authors track the origins of the controversy and cover arguments of both sides in chronological order. From their point of view, the discussion hasnt been resolved, and its main underlying aspects were ideological beliefs and fundamental methodological controversies on the nature of equilibrium and on the role of time in economic theory. The article is published with comments written by other leading theoreticians.

The Mythology of the «Keynesian Crisis» or Where Is Keynes Calling Russia?

Vestnik NSUEM ◽  
2021 ◽  
pp. 22-34
Author(s):  
V. Z. Balikoev
Keyword(s):  
Economic Theory ◽  
Market Economy ◽  
Invisible Hand ◽  
Author State ◽  
State Capitalism ◽  
Free Competition ◽  
Relevant Today ◽  
Laissez Faire ◽  
Government Management ◽  
Development Of Economic Theory

The article analyzes and criticizes a vicious practice of the economists who attribute the ideas to the eminent economists who didn’t elaborate those ideas.The practice existed in the 19th and 20th centuries. It does exist today. It has done a huge damage to the development of economic theory and certain and specific economic sciences. Especially in the last century Keynesianism was at the receiving end since it clearly defined the watershed between the obsolete but die-hard «laissez-faire» economic theory – «invisible hand of the market»,free competition and government management of the economy.In this regard the economic theory constantly faces the question of certain «Keynesianism crisis», allegedly indicative of obsolescence of Keynesianism as economic theory.The article on the contrary proves that «Keynesianism crisis» is far-fetched and of ideological nature. Keynesianism itself is relevant today, more than ever, especially in the conditions of Russia, where, according to invincible belief of the author,state-directed market economy named state capitalism is being formed slowly and surely.

Liberalism in Crisis and the Promise of a Reconstructed Liberalism

2019 ◽  
Vol 139 (2-4) ◽  
pp. 189-212
Author(s):  
Peter J. Boettke ◽  
Rosolino Candela
Keyword(s):  
Economic Theory ◽  
Institutional Context ◽  
Equilibrium States ◽  
Market Order ◽  
Relative Neglect ◽  
Laissez Faire ◽  
Marginal Revolution ◽  
Common Understanding

What explains the simultaneous critiques of economic theory and liberalism during the 1930s? Early neoclassical economists had a common understanding of the proper institutional context undergirding a liberal market order. From the marginal revolution emerged a growing emphasis on analyzing markets as equilibrium states rather than processes. Because the institutions that frame a liberal market order were taken as given, to the point of relative neglect, this resulted in the notion that markets operated in an institutional vacuum. The resulting association of liberalism with laissez-faire, therefore, prompted a restatement of the role institutions play in the operation of a liberal market order.

Energy-Saving Household Behavior as an Object of Research and Projects

2020 ◽  
Vol 9 (3) ◽  
pp. 16-22
Author(s):  
Rais Burganov ◽  
Liliya Urazbahtina
Keyword(s):  
Economic Theory ◽  
Energy Conservation ◽  
Energy Saving ◽  
Household Behavior ◽  
Point Of View ◽  
Theoretical Approaches ◽  
Current State ◽  
Irrational Behavior ◽  
Technological Concepts ◽  
Saving Behavior

The energy-saving behavior of households has a huge and obvious role in the development of the economy and society. However, the theoretical approaches of economists on this topic are developing more slowly than its applied aspects. The aim of this work is to consider the energy-saving behavior of households from the angle of the main directions of economic theory. The research methodology is based on the principles of the implementation of areas of economic theory, as well as on the use of total energy, consisting of electric, thermal, solar, mechanical and other types of energy. The article proposes a classification of factors (main and secondary, main and auxiliary) that affect household behavior in the field of energy conservation and which should be taken into account when drawing up its mono and polyparametric mathematical models. Moreover, each variable can be positively or negatively reflected in the rational or irrational behavior of households in energy conservation. The paper gives the results of the consideration of problems in shaping the behavior of households from the point of view of the neoclassical direction of economic theory and institutionalism, as well as on the basis of its moral-educational and technological concepts. The current state of introducing the development of energy-saving and nature-friendly technologies into the everyday activities of households will transform the behavior of households in the field of consumption of any type of energy.

The Early Mathematics of Welfare

2020 ◽  
Vol 52 (4) ◽  
pp. 683-707
Author(s):  
Mario Pomini
Keyword(s):  
Economic Theory ◽  
Social Welfare ◽  
Social Welfare Function ◽  
Welfare Economics ◽  
Economic Planning ◽  
Mathematical Tool ◽  
Early Mathematics ◽  
Subjective Theory ◽  
De Finetti ◽  
Laissez Faire

Bruno de Finetti (1906–1985) is well known as the founder of the subjective theory of probability. Less known is his contribution to economic theory. The article presents the contributions of de Finetti in the field of welfare economics. He advanced a new mathematical tool: the theory of simultaneous maxima. On this base, he criticized the laissez-faire interpretation of the Paretian theory and advanced the idea of a social welfare function, reflecting the debate on economic planning among Italian corporatist economists.

Behavioral Economics

2020 ◽  
pp. 281-298
Author(s):  
Miloš Krstić ◽  
Nebojša Pavlović
Keyword(s):  
Economic Theory ◽  
Social Behavior ◽  
Behavioral Economics ◽  
Human Behavior ◽  
Psychological Research ◽  
Point Of View ◽  
Psychological Dimension ◽  
The Social ◽  
Ancient Times ◽  
State Interference

The idea of the significance of the psychological dimension of human behavior is not new and has existed in the social sciences since ancient times. Accordingly, there is an endeavor to place economic analysis on the foundations of psychological research, which takes its form of expression in economic theory through the affirmation of behavioral economics. The aim of this chapter is to critically analyze various normative research programs in behavioral economics and to consider the importance of alternative concepts, models, and theories from the point of view of improving understanding of real economic and social behavior. The particular value of this chapter lies in affirming the importance of a program of behavioral economics known as new paternalism, which is based on challenging the concept of maximizing rationality and opens a new dimension of understanding the justification of state interference in the sphere of economy and society.

Institutional Economics

2020 ◽  
pp. 185-200
Author(s):  
Zehra Doğan Çalışkan
Keyword(s):  
Economic Theory ◽  
19Th Century ◽  
Economic History ◽  
Institutional Economics ◽  
Point Of View ◽  
Inductive Method ◽  
Economic Theories ◽  
Historical School ◽  
Classical Economics ◽  
New Perspective

Since the mid-19th century, the thinkers of historical school challenged the deductive, abstractive, and decisive methods of neo-classical economics. According to historical school, social terms have been changed within space and time. Therefore, they defended that the economic theories could not be universal but could only be relative. Instead of professing laws with universal validity, it is more important to reveal the changing structure of society with the extensive studies of economic history. The inductive method of German historical school brought a new perspective into economic theory with theorems such as to consider society as an organism beyond the individuals who would only seek their benefits and the necessity of historical followings in the economic events. From this point of view, it is possible to observe the traces of historical school in the old institutional economics literature.

How Many Paradigms There are in Economic Theory – and Can it Become a One-paradigm Science

2021 ◽  
pp. 129
Author(s):  
Dmitrij Egorov
Keyword(s):  
Economic Theory ◽  
Point Of View ◽  
Economic Science ◽  
Individual Choice ◽  
Equilibrium System ◽  
The Past ◽  
Scientific Disciplines ◽  
Modern Economic ◽  
Development Of Economic Theory ◽  
Science Subject

Over the past 100 years, economics has stood out from other scientific disciplines because of the presence of two fundamentally different approaches to understanding its subject: from a systemic point of view, and from the point of view of individual choice. All the main directions of modern economic theory turn out to be reducible to two paradigms, conceptually related to two main interpretations of the economic science subject. The understanding of the economy as an equilibrium or non-equilibrium system is associated with two said paradigms. The author believes that the development of economic theory after Keynes can be interpreted as a series of attempts to integrate the identified paradigms. In another form, this is the question of the synthesis of micro- and macro-approaches in economic theory. 

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